Zero duty on 75pc tariff lines for China to hit industry

LAHORE - The Pakistan Industrial and Traders Associations Front (PIAF), as a major stakeholder, has opposed the government plan of offering zero duty on almost 6,000 tariff lines in the second phase of Pak-China Free Trade Agreement (FTA), as it would hit all major industrial sectors in Pakistan.

PIAF chairman Irfan Iqbal Sheikh, in a joint statement with senior vice chairman Tanveer Sufi and vice chairman Shahzeb Akram, rejected the revised FTA with China, arguing that Pakistan does not possess exportable surplus so exports could not get a boost in a big way even if it gets reciprocal incentives from China.

He suggested that Pakistan should made a special request to Beijing to take remedial measures in the wake of eroded exports by granting concession on products so revised FTA could give boost to Pak exports too, as trade deficit increased from $3 billion to $12.65 billion over the last decade. China’s exports to Pakistan increased from $4 billion in 2006-07 to $14.5 billion in 2016-17. Pakistan’s exports increased from $0.5 billion to $1.47 billion during the same period.

It is unfortunate that Pakistan and China had agreed for granting tariff reduction on 75 percent tariff lines under the proposed revision in the FTA.

Irfan Iqbal said that Pakistan is going to increase the number of items with zero duty from 2,600 tariff lines to 6,000 tariff lines, which will have a much larger negative impact on the country’s industries. “We appreciate the FBR for sternly opposing the revised FTA, as it would negatively affect the country’s industries.”

The government has to devise a strategy in the light of impact on domestic industry and China should have been asked to liberalize to reduce tariff on 75 percent tariff lines, reduce sensitive list to 10 percent while retaining and deepening preferences. Pakistan should request for managed trade in sensitive sectors on the pattern of Brazil-Argentina Auto Pact and linking tariff liberalization with investment of Pakistan Auto Policy 2016-21.